The Animated Forest is located between level 13-15 of the Caverns of Chaos, below a level that will have two down staircases: one to the Animated Forest, the other to the Dwarven Halls. Note that players wishing to complete Thrundarr's second quest must get the quest before descending to the Animated Forest if they don't want to forfeit the reward (and end up having to do another random monster quest for zero reward).